Rebirth

The Tiananmen debacle resulted in a brief spell of conservatism, but within a few years, Deng Xiaoping choreographed the rebirth of reform and openness with his historic “southern tour.” With Deng’s assurance that “to get rich is glorious,” entrepreneurial energy exploded again, concentrated now in the coastal cities. The leadership, guided by economic czar Zhu Rongji, enacted a far-reaching structural transformation of the economic sphere, anchored in privatization of state-owned enterprises. Ironically, China’s lack of full reform—especially in the financial sector and monetary policy—protected the Chinese economy from the vicissitudes of hot money and capital flight that ravaged its neighbors during the East Asian financial crisis.

Deng Accepted That There Were Limits to His Expertise

Changing China's Market Framework

China's Opacity Protected it from Crisis

Entrepreneurship Was a Key to China's Boom

Rose Luqiu

Executive News Editor, Phoenix Satellite Television

Luwei (Rose) Luqiu, a 2007 Harvard Nieman Fellow, is an executive news editor of Hong Kong-based Phoenix Satellite Television. She is known for being fearless in her pursuit of news, often traveling into the heart of war zones. Luqiu was the first Chinese journalist to enter Baghdad in 2003 to report the war in Iraq.

Luqiu won the "Reporter of The Year" award presented by Sohu for her outstanding coverage of the Iraq war and was recognized as one of the "Most Influential Chinese women" by China Women Magazine in 2003. She was also mentioned in the Chinese edition of Forbes: "China's Top 100 Celebrity Chart" in 2004. Her blogs in Chinese can be found at the Sina and Phoenix TV Web sites.

I, personally, was born in Shanghai. I think that the biggest change that was brought to me by that era was when I entered university. I started my studies at Fudan University in 1988. In 1989, because of the June 4th incident, even though we were only first-year students, the incident made us think a lot. The whole atmosphere of Fudan university was changed. In the past, we were probably more concerned with philosophy, or topics regarding how to change society but, after the June 4th incident, the university became a place where people would want to dance and party. Perhaps everyone thought that there was not much meaning in discussing these topics. So, everyone focused more on how to find a better job, how to improve our materialistic life. So, when I graduated in 1992, the whole of China also changed the way it assigned graduates to jobs. We were no longer assigned by the government, we had to find our own jobs. Well, at that time, my job search was directed towards foreign companies -- joint venture enterprises -- because, at that time, comparatively speaking, the pay of joint venture enterprises was the highest. Another reason is because it didn't require backdoor influence or connections. You just needed to take an exam, interview, and if they liked you and you had the ability, then you could get the job. Because my parents were only common workers, I could only rely on my own grades to get into university. So, when I saw my classmates using backdoor influence and doing a lot of things in order to get jobs in state-run work units which, at that time, they were very attractive, I thought that my parents couldn't do this for me and I didn't like it either. So, I decided to go for joint venture enterprises. I remember my first job should have been DHL. And a lot of my friends above me actually went to The Portman, a five-star hotel where they worked as bellboys, or housekeepers. But, they thought the pay was high, there was a lot of freedom, and they thought that in the future if they wanted to go to America and other countries to study, this would give them a very good foundation. At that time, I also thought this way. But, during graduation, I suddenly changed my mind and gave up the job at DHL and went to Shenzhen. At that time, Shenzhen had just opened up. For us, Shenzhen is a special zone, a mysterious place. So, I decided after graduation to go to Shenzhen and find a job. Maybe also because my family is a little different from other people's, I have relatives in Shenzhen who established a company, because at that time, there was encouragement for individuals to open up businesses, so you can say that they were the first wave. So, I went with them to Shenzhen to see how we can do business. I think that during that year, you could see how the market and economic reforms brought a lot of change to peoples' lives. At that time, I saw a lot of people who suddenly got rich, but after a year, disappeared, or became very poor, or went to prison. Right now, thinking back, of the many rich people I knew ten years ago, around 90% of them are in prison or have lost their money. It was a very big change. Because at that time, right at the beginning of the Reform and Opening, rich people weren't those who were well-educated, university-educated or part of the elite. At that time, in 1992, if you had money, you were part of the lower social classes who were willling to try new methods. They will create wealth. However, these people will not accumulate wealth, so after a few years, a lot of them disappeared. So I think that this is one of the very meaningful experiences I had in Shenzhen. Well, I stayed in Shenzhen for a half a year, but I guess, for a university graduate like me, doing business is not very appropriate, so, in the end, I took a job at a joint venture, Pricewaterhouse where I began to work as an auditor. One of the good things about being an auditor is that during those two to three years, you get to see a lot of joint ventures. At that time joint venture was a very fashionable saying. Apparently state-owned enterprises were all searching for foreign partners to try to get preferential tax treatment, policy preferences, including entering the market. However, at that time, if you looked at these accounting firms, there were the "Big Six". When they were competing for businesses in China, there was a distinct "Chinese characteristic". Because, at that time, if you wanted to get a deal, you needed to know people, you needed to find connections, you needed to find partners. If they had connections with leaders, then they could get more deals. At the time I was at PW, I always heard that our PW partners compare with AA, Arthur Andersen, partners because they got more deals than us -- they no longer exist. This is probably because they had a partner who knew someone high up in the government, so every time a SOE (state-owned enterprise) had an IPO or there was a merger, they got more deals than anyone else. At that time, I saw these foreign enterprises begin this profession so, now, when I look back to see why so many foreign enterprises are being sued for bribery or business, I feel that this is not at all surprising. Because, from the beginning of the Reform and Opening period, when foreign enterprises came to China to do these things, they had to follow these regulations. The situation has not changed a lot in these years.